Friday, August 25, 2023

SpiceJet faces financial crisis, court orders 270 crore payment to Kalanithi Maran

Indian budget airline SpiceJet informed a court on Thursday that it is facing financial challenges. The Delhi High Court, in a division bench, upheld a previous order that required SpiceJet and its promoter Ajay Singh to pay an amount of Rs 270 crore plus interest to Kalanithi Maran, the Chairman of Sun Group.

The court refused to stay this order and warned that if Kalanithi Maran does not receive the payment by September 10, the airline will have to attach their assets.

The next hearing will take place on September 11.

Previously, Maran’s legal representatives argued that SpiceJet and Singh submitted their affidavit in a non-standard format, which was not in accordance with the law.

The Delhi High Court expected Singh to appear for his failure to comply with the court’s order to disclose assets and revenue collection.

SpiceJet’s statement regarding its financial difficulties came during the hearing in response to Maran’s lawsuit seeking payment of outstanding debts.

It’s worth noting that while India’s largest carrier, IndiGo, and Air India, owned by the Tata group, have placed orders for hundreds of new planes, another budget airline, Go First, filed for bankruptcy in May.

They have scheduled the next hearings for both the Delhi High Court case and the Supreme Court case on September 11.

Maran’s legal counsel requested the court to direct that 50% of the daily revenue collected by the judgment debtors be paid to the decree holders. They also sought this payment on a weekly basis.

The counsel urged for prompt filing of asset disclosures and the submission of account statements within one day in court. They also called for the full payment of the arbitral award amount to the decree holders.

SpiceJet has made an offer to deposit 750 million rupees ($9.08 million) within 10 days. However, the presiding judge has issued an order, mandating the airline to pay 1 billion rupees ($12 million) by September 10. The judge also issued a stern warning, indicating the possibility of seizing the company’s assets if they do not pay on time.

25/08/2023 Statesman

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